Maker’s Mark Lowers Proof to Meet International Market Demands

Bourbon

February 11, 2013

I don’t have a time machine. Do you? That’s what Maker’s Mark would have needed to meet today’s market demand. Instead of increasing corn and wheat orders six years ago or reducing aging, Maker’s Mark lowered its proof from 90 to 84 to meet worldwide demand.  (Read my previous interview with Maker’s Mark COO Rob Samuels.)

This is the very first bottle of Maker's Mark. I've seen it once, and my Nikon 2Dxs and I took many frames.
This is the very first bottle of Maker’s Mark. I’ve seen it once, and my Nikon 2Dxs and I took many frames.

Maker’s Mark is aged six years in charred new oak barrels. In order to meet 2013 demand, Maker’s Mark would have needed to make product forecasts in 2007, a year with very different market dynamics than today.

In the past year, Colombia, Brazil and Panama have significantly reduced tariffs, while Korea outright eliminated bourbon tariffs. And, the 2012 Permanent Normal Trade Relations with Russia opened export potential.

Korea’s minister of economic affairs Gheewhan Kim has said Korea is the No. 7 whiskey importer, while the Kentucky Distillers Association says Korea is the No. 11 spirits market. As for Russia, well, it’s Russia—they like to drink.

All whiskey brands face the same supply challenges to meet these new markets. Maker’s Mark chose to pursue these new and existing markets.

According to the Distilled Spirits Council of the United States, American whiskey exports will represent 70 percent of the record $1.5-billion in 2013 American spirits exports.

To supply the growing domestic market and promising international markets, Maker’s Mark could have changed the price, bottled younger whiskey without telling you (perfectly legal since there is no age statement on the bottle), get rid of its new Maker’s 46 product, changed the proof or risk small- to mid-level retailers running out. The megastores will always be supplied, but what about the small liquor store that buys one case of Maker’s Mark a month?

When I interviewed Rob for Latitude News, he said they could barely think about Korea because supply was so limited. The interview took place more than a year ago and before Russia, Brazil, Columbia and Panama tariff reductions were announced, so I imagine the other international developments swayed the pendulum just enough to influence a proof-change decision.

It’s not like this hasn’t happened before. Jack Daniels’s lowered its proof to 80 in 2004 and it’s still the world’s top-selling American whiskey.

Perhaps, Maker’s Mark’s proof lowering stings a little more because the brand has steadfastly said it would never change Maker’s Mark. “The only thing my dad told me was not to fuck with the whiskey,” Bill Samuels Jr. told me.

Bill has frequently shared that sentiment, often switching the F-bomb for “screw.”

Under his leadership, Bill sought to protect the company’s most-important trademark, the dripping red wax. When small brands appeared on liquor shelves with wax dribble slipping down the neck, the Maker’s Mark legal team sent ceased-and-desist letters. When big liquor companies fought back, like Diageo, Maker’s won in landmark fashion. Bill also took a boring bourbon category, filled with “Farmer John Sitting on the Hay Bell” ads, and made bourbon marketable to the average person outside of Kentucky. The first tagline, “It tastes expensive … and is,” was followed by catchy copy with red wax artwork: “Wardrobe malfunction,” “Extras wanted,” and “Available for adoption.”

Maker’s Mark earned its first profit in 1967, a Wall Street Journal article in 1981 and more than 100,000 distillery visitors a year.

But, Bill didn’t exactly follow his father’s orders. He messed with the whiskey. In 2010, he and then-master distiller Kevin Smith took seared French-oak staves and added them to existing bourbon barrels to create Maker’s 46, the company’s first new product in 50 years.

On the first day of its bottling, Maker's 46 is dipped into the traditional red wax Maker's is known for. It's the company's first new product in more than 50 years.
On the first day of its bottling, Maker’s 46 is dipped into the traditional red wax Maker’s is known for. It’s the company’s first new product in more than 50 years.

The TTB approved a Maker’s 46 label: “Kentucky Bourbon Whisky Barrel Finished with White Oak Staves.” No label before or since has said “finished with white oak staves.” Maker’s 46 was as groundbreaking as the brand’s initial red wax. At the time, some heralded it as innovation and others quietly hated it because the practice defied bourbon tradition.

Enter Rob, who takes over for his father in April 2011. He is nothing like Bill, who wears rock star jumpsuits, orange wigs and Christmas light vests to attract attention. Rob is a numbers guy, who fought through dyslexia to become an analytical mind. He’s a calculating soul who may not enjoy the limelight or media interviews, but truly understands this business’ financial procedures.

Bill Samuels in one of his usual costumes at his retirement party in 2011.
Bill Samuels in one of his usual costumes at his retirement party in 2011.

“Rob’s got a tremendous track record in our company of working in both the United States and internationally,” Jim Beam CEO Matthew Shattock told me in 2011. “The Maker’s future is not just going to be in the US; it’s going to be international. Rob is going to lead us into being a truly big global brand.”

The operative word is “global.” Everything about this move of lowering the proof sings international intention. Nobody at Jim Beam, Maker’s parent company, could predict five major markets easing its tariffs, so I expect their hand was forced here.

But, there’s no doubt Maker’s Mark has a PR issue. They need to show their brand loyalists that Brand Ambassadors are not being sandwiched with the international masses.

Not that they’ve asked, but if Maker’s Mark wants my advice: You’ve damaged your reputation among those who once loved you more than you’ll ever know. These loyalists stood in line for hours to get your autograph at Keeneland and traveled hundreds of miles for your Brand Ambassador parties. They planted their “Cocktail Party” signs in their yards and only promoted one bourbon during the holidays. Maker’s Mark, you sprung this announcement on your biggest fans without a hint of preparation. You built this brand on your fans’ backs, on their wax-dipped hats, so don’t forsake them. Here’s how you make things right: Borrow your sister brand Knob Creek’s single barrel production line for a day and pick your best single barrels to bottle. Or, create a premium line, go ahead and raise the proof to 100 or higher, and give Maker’s fans something truly special. All you need to do is set aside 40 to 100 barrels a year and charge whatever you want. People will pay whatever you ask.

They always have.

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